AN Associated Press story over the weekend revealed a largely unnoticed economic disaster unfolding in the US: The rapid dissolution of the nuclear power industry is driving small towns into desperate financial straits, resulting in higher taxes, cutbacks in services and the disappearance of jobs and small businesses.
There are currently 61 nuclear generating plants in the US, which produce about 20 percent of the country’s electricity. There used to be more, but a rash of closures over the past 20 years has reduced the number of facilities. Nearly all of these plants, in part due to the risky nature of nuclear power, are located in “out of the way places,” as the AP article put it—in semi-rural areas near small towns.
While they are operating, the plants are very good neighbors. They provide a large amount of tax revenue to the local government, which funds facilities and services the community probably wouldn’t otherwise be able to afford. They bring with them highly skilled and well-paid workers and their families, encouraging growth of local businesses. Apart from all the organic economic activity, the companies operating nuclear plants are generous with CSR initiatives, again in part because of the not altogether unreasonable perception that nuclear power is potentially dangerous.
For places that do not have a strong local economy, the nuclear plants have been a godsend. The towns or counties where they are located have become reliant on them, but are now being systematically crushed as the plants close one by one.
Most of the nuclear plants in the US are of design types that were developed in the 1960s—systems that are of similar vintage as the mothballed Bataan Nuclear Power Plant here—and under the best of circumstances have an effective operating life of only about 30 years. Many of the nuclear plants in the US are reaching the end of their practical life, but even the less old ones are being viewed critically by their operators, because they have become more expensive to operate and maintain than conventional systems like natural gas, and renewable energy sources that are rapidly becoming cheaper. A nuclear industry trade group, according to AP, forecast last year that 15 to 20 nuclear plants in the US were at risk of premature shutdown due to economic pressure; the US Department of Energy doesn’t give a numerical estimate, but notes that the industry faces serious challenges, and is likely to contract.
For communities that host nuclear plants, the closures are disastrous. A town in Wisconsin lost 70 percent of its annual revenue; one county in Florida saw a third of its revenue disappear overnight. A township in Ohio, where the shutdown of the Davis-Besse nuclear plant (in operation since 1971) is expected within a year or two, has already calculated it will lose, among other things, $8 million a year from the local school district’s budget.
One example given by the AP story I can vouch for personally, having seen the before-and-after impact of a nuclear plant on a local economy firsthand: The town of Zion, Illinois, which lies along the shore of Lake Michigan north of Chicago was at one time a relatively upscale lakeside community thanks to its nuclear plant. Passing through again three years after the plant closed in 1997, I was struck by how rapid the change was; Zion had quickly gone from a stylish suburban village (it lies roughly midway between Chicago and Milwaukee) to a virtual ghost town, with most of its downtown storefronts empty and a significant number of its residential properties forlornly decorated with “For Sale” signs.
In the case of Zion and many other places, the damage is long-term; the shuttered Zion plant is located on prime lakefront property, the sort of land that would be a developer’s and local tax assessor’s dream—if it was not rendered unusable for decades to come, possibly forever, because radioactive waste from the plant is still stored there.
One concept of management that governments are not very good at—particularly democratic governments that see a change in personnel, philosophy, and vested interests every few years—is recognizing and planning appropriately for the life cycle of economic drivers. Take for instance the (hopefully) hypothetical example of the BNPP: Made operational, the plant would have a working life of perhaps 30 years—realistically, probably less, because it’s already an obsolescent design—during which time its host community, Morong in Bataan, a place that doesn’t otherwise have much going for it, would benefit greatly from the revenue the plant generated.
When the plant closed, the revenue would instantly stop, and the municipality would furthermore begin to incur
either opportunity or actual costs from the existence of a large, unusable parcel of land. Unless the local and national governments spent the preceding 20 or 30 years investing the proceeds from the operating plant into building a sustainable local economy—long-term focus that is out of character for Filipino politicians or the communities they serve at any level—the area would revert to a depressed state, or worse.
So far, nothing in the advocacy for exploring the use of nuclear power in the Philippines has satisfactorily explained how the technology would be used without imposing a heavy mortgage on the future of the host communities or the country. Until viable solutions to avoid that devil’s bargain are conceived and presented, the country should focus on energy developments that are within its grasp.